Warmer rhetoric re: China from U.S..........>

US TSYS: Warmer rhetoric re: China from U.S. President Trump applied fresh

weight to the developed FI space overnight, before a stronger than expected yuan

fix from the PBOC helped to accelerate risk-on flows (although the major

regional equity markets remain well shy of neutral at writing). Trump noted that

we will know in 3-4 weeks if China talks will be successful, adding that he

feels they will be.

- T-Notes last trade at 124.10 with the U.S. 10-Year cash Tsy yield at 2.416%.

Cash yields are trading 0.8-1.7bp higher across the curve. Overnight option flow

saw small selling of TYM9 125.00 and 124.75 calls.

- Eurodollar futures trade 0.5 ticks lower to 0.5 tick higher through the reds,

notable overnight flow in the space was dominated by payers, even with Tsys

offered.

- Focus today will continue to fall on the trade war backdrop, with several Fed

speakers due up; Williams, Daly & George will speak.